AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 80
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Verrna, one of the Directors of the Company was in possession of four diamond rings which were sent to the prospective buyers, Shri. Manjeet Singh of M/s. Gyanvashnav Hotel, Swaroop Nagar, Kanpur through one Shri Bhupender Garg of Kanpur. It was further mentioned in the report that said diamond rings were retained unlawfully by said Shri Manjeet Singh and on account of this Shri Gopal Verma lodged an F.I.R. with S.P. (South), Kanpur and eventually the said diamonds were recovered on 07.07.2000 and were made case property in the case of State vs. Manjeet Singh and Others. It was further mentioned in the report that Shri Gopal Verma infact was in possession of undisclosed diamonds and on being involved in the aforesaid case, he tried to regularize the state of affairs in such a way that the whole transaction may look like the real one and the source of the diamond may be explained. 3. It was further explained that the said diamonds were originally purchased by one M/s. Om Enterprises Kolkatta from M/s. Ronak Gems Pvt. Ltd. Surat for consideration of Rs. 16,27,200/- which were subsequently shown to have been sold to the assessee company. In the JDIT(lnv.) report, it has also been me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th of May, 2000 itself as deposed by him during the course of his examination u/s. 131 of the Act. 4. On the basis of this report, the Assessing Officer has made necessary enquiries and called explanation from the assessee. Though the assessee has explained the facts and circumstances duly supported by documentary evidence under which appellant was in possession of these diamond rings, but the same was not accepted by the Assessing Officer and he accordingly made an addition of Rs. 21,30,372/- on substantive basis in the hands of Shri. Gopal Verma and on protective basis in the hands of the assessee under section 69A of the Act. 5. During the course of hearing, the ld. counsel for the assessee has invited our attention to the order of the Tribunal in the case of Income Tax Officer vs. Shri. Gopal Verma, Kanpur in I.T.A. No. 884/LUC/2006, in which the correctness of the explanations furnished by the assessee was examined and the Tribunal having accepted the explanations furnished by Shri. Gopal Verma, Director of the assessee-company has deleted the addition in his hands. The order of the Tribunal was passed on 31.3.2007 and nothing is available on record with regard to the final ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ossession of any documentary evidence till 12.06.2000. It is only when the assessee find it difficult to get the diamonds rings back from Shri Manji Singh, reported the matter to Police and started hunting for the evidence. (c)In this connection assertion made by Smt. Surinder Kaur mother of Shri Manjeet Singh as mentioned in para 7 above, is of much importance. (d) The statement of Shri Sunil Karigar is of importance in the sense that the size of the diamonds were given to him in May, 2000, accordingly the rings were prepared by him and the diamonds were fitted in same rings. The statement by Shri Sunil Karigar was given without any force, pressure and influence. (e) No one has come forward to claim the right and ownership of the diamond rings before the Police and the court. The evidence regarding receipt of diamonds in question from M/s. Om Enterprises Calcutta, is an afterthought and has been arranged to give a colourful device because the same must have been given to the assessee by Shri Hari Shankar Dubey on 07.06.2000 itself and also given to Smt. Surinder Kaur as desired by her. (f) The purchase of diamonds by M/s. Om Enterprises from M/s. Raunak Gems (P) Ltd., Sura....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in support of expenses shown in P&L A/c. The ITI's report regarding sale and loan transaction is placed in filed. Total Income is computer as below:- Profit as per P & L A/c. ..... 61,571.00 Add : 10% Telephone expenses For personal use 1,505.00 1/3 Motor Car expenses For personal use 8,204.00 General exp. Not duly Vouched 1,073,00 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been mentioned that Id. Counsel for the revisionist argued that in this case from perusal of the case diary it is proved fact that Gopal Verma proprietor of Man Singh & Sons, Birhana Road, Kanpur lodged FIR and moved the investigating authorities for coming into motion and on the basis of FIR Police came into action and in consequence above 4 diamond rings -were recovered by A.Satish Ganesh, Asstt, S.P. on 7.7.2000, From perusal of the recovery memo it was also a proved fact that the value of recovered articles in total was about Rs. 12,48,000/- Shri Gopal Verma had stated in his application that these diamond rings which were recovered, were given by Bhupendra Garg on 12.6.2000 for approval and Bhupendra Garg had informed him that his brother was admitted in the hospital in injured condition and Bhpendra Garg also informed that all the four diamond rings were with Sardar Manjeet Singh and in this raspect he moved an application before S.P. South and case was registered in Cr. No.75/2000 and in support of their case, they have filed the approval issued voucher which were issued by Man Singh and Sons Jewellers (P) Ltd. and the above approval vouchers were dated 12.6.2000 which were....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ge -who was pleased to order for release of these articles in supurdigi of the applicant. 2.2 Photocopy of the power of attorney given by M/s Om Enterprises has also been filed before me. The contents of this power of attorney are reproduced below: "I Om Prakash Dubey, age about 37 years son of Sri Hari Shanker Dubey partner of Ms Om Enterprises of 4 Benstalla Lane, 2nd floor, Calcutta-700007, do hereby solemnly affirm and declare that : 1. I am carrying on the business in jewellery items, precious and semi-precious stones under the trade name of M/s. Om Enterprises, 4 Banstalla Lane, 2nd floor, Calcutta-700007. 2. My trade concern M/s. Om Enterprises is duly registered with the commercial lax officer under the Bengal Finance Sales Tax Act, 1941 as per registration no.JK 5727a and Central Sales Tax No.3297A(JK)/C. 3. We are regular assessee of Income tax department, having PAN 13(5)/0-547 assessed under the jurisdiction of Calcutta. 4. We have given 4 pcs. Of diamond as per following details to M/s. Man Singh & Sons Jewellers Pvt. Ltd. 59/39, Birhana Road, Kanpur vide approval challan no.349 dt. 7.6.2000. Item No. - item Weight 1. Cut & Polish Diamond 2.0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Dubey recorded on 2.8.2000 on oath. He had stated that he was a partner of in M/s. Om Enterprises, 4, Banstala Lane, Calcutta. In response to query no.3 he had stated that main buyers outside Calcutta were (1) M/s. Mansingh & Sons Jewellers (P) Ltd., Kanpur (ii) B.N.Majumdar of Guwahati and some other concerns also, the names of whom he could not remember exactly. He had also stated that he knew Shri Gopal Verma and his brother Raju of this company for the last 3-4 years. He was asked whether any transactions with M/s. Mansingh & Sons Jewellers (P) Ltd. was made in the current financial year. He replied that Jhey had done some transactions through the firm M/s. OM Enterprses during the current financial year. The ledger copy of sundry debtors was produced for reference. He had also stated that they had given 4 pieces of diamond to them (M/s. Mansingh & Sons Jewellers (P) Ltd.) for approval but the transactions was yet to be settled. He had given the details of these diamonds. The total purchase value of these diamonds was Rs. 16 lakh approximately. Nut he had quoted Rs. 17.5 lakhs to them for these transactions. He was asked whether he had any evidence of delivery of the above item....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llan book as found inventorised as OE/11 it appeared that many of the pages were missing according to SI. No.326 and 331 the pages 327 to 330 were missing. It was replied that these challans were given to the party for approval only and whenever the buyer approved it, sale was affected by cash memo or bill. In case of rejection, the goods were received back alongwith the approval challan. In both the cases, the original as well as copy of the approval challan was destroyed. He was asked to explain as to why he resorted to such practice instead of keeping the copy. It was replied that this practice was being followed since beginning and also this was normal practice of this trade. He was required to give the turnover of the firm and the names and addresses of the main customers. He replied that the turnover of the firm was approx. Rs. 45 lakh and the main customers were as under: P. C. Chandra & Sons Pvt. Ltd. Raskla & Brothers Paras Jewellers Modern Guinea House Pvt. Ltd. Mansingh & Sons Jewellers (P) Ltd., Kanpur. B.N.Majitmdar (Karimganj, Assam). He was asked whether any record were kept for sending any items before sale and also receiving goods before actual purc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... produced photocopy of the assessment order passed in the case of M/s. Om Enterprises for the assessment year 2001-02. I have gone through this assessment order. It is mentioned in the assessment order (hat the reasons for selection of this case for scrutiny was based on inquiry report received from JD1T (Inv.), Unit-II, Kanpur. The AO in this assessment order has given findings as under : "On going through the papers submitted by the AR it is ascertained that the alleged 4 diamond rings were duly purchased from Raunak Gems (P) Ltd at the cost ofRs.16,27,000/- Bills, vouchers, stock list and mode of payment were duly submitted and produced in support of purchased. It reveals the said diamonds rings were sent for approval to Shri Mansingh & Sons Jewellers (P) Ltd., Kanpur where it was stolen in Dacoity. There is no such evidence in support of sales. The ITI was directed to inquire about the case but no such information regarding sale is received from JDIT (Inv.), Calcutta. Hence it cannot be concluded that the alleged 4 diamond rings were sold after purchase. " 2.5. From the facts of the case as discussed above it is clear that the appellant had established its case regarding th....